<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
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[ ] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
PERIOD FROM MARCH 30, 1998 TO DECEMBER 31, 1998
COMMISSION FILE NUMBER 1-13933
A. Full title of the Plan:
VLASIC FOODS INTERNATIONAL INC. SAVINGS AND
401(k) PLAN FOR HOURLY-PAID EMPLOYEES
B. Name of issuer of the securities held pursuant to the Plan
and the address of its principal executive office:
VLASIC FOODS INTERNATIONAL INC.
VLASIC PLAZA, SIX EXECUTIVE CAMPUS, CHERRY HILL, NEW JERSEY 08002-4112
TELEPHONE NUMBER: 609-969-7100
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<PAGE> 2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator and
Participants of Vlasic Foods International Inc.
Savings and 401(k) Plan for Hourly-Paid Employees
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Vlasic Foods International Inc. Savings and 401(k) Plan for Hourly-Paid
Employees (the "Plan") at December 31, 1998, and the changes in its net assets
available for benefits for the period from March 30, 1998 (inception) to
December 31, 1998, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by the
Plan's management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for the opinion expressed
above.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statement of net assets available for benefits and the statement of changes in
net assets available for benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits and
changes in net assets available for benefits of each fund. These supplemental
schedules and fund information are the responsibility of the Plan's management.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
June 18, 1999
<PAGE> 3
VLASIC FOODS INTERNATIONAL
SAVINGS AND 401(k) PLAN FOR HOURLY-PAID EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------------------------------------------------------
FIDELITY INVESTMENTS
--------------------------------------------------------------------------------
Retire- Spartan Inter-
ment U.S. national Partici-
Vlasic Campbell Managed Money Equity Equity Growth Growth & Asset pant
Stock Stock Income Market Income Index Magellan Company Income Manager Loan
Fund Fund Portfolio Portfolio Fund Fund Fund Fund Fund Fund Fund Total
------- -------- --------- --------- ------ ------ --------- ------- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments,
at fair value:
Common stock
funds...........$2,764 $11,743 $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $ -- $14,507
Mutual funds.... -- -- -- 525 1,291 448 1,620 685 237 272 -- 5,078
Collective
trust fund...... -- -- 219 -- -- -- -- -- -- -- -- 219
Loans to
participants.... -- -- -- -- -- -- -- -- -- -- 1,242 1,242
------ ------- ---- ---- ------ ---- ----- ---- ---- ---- ------ -------
Total
Investments..... 2,764 11,743 219 525 1,291 448 1,620 685 237 272 1,242 21,046
------ ------- ---- ---- ------ ---- ------ ---- ---- ---- ------ -------
Net assets
available for
benefits $2,764 $11,743 $219 $525 $1,291 $448 $1,620 $685 $237 $272 $1,242 $21,046
====== ======= ==== ==== ====== ==== ====== ==== ==== ==== ====== =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 4
VLASIC FOODS INTERNATIONAL
SAVINGS AND 401(k) PLAN FOR HOURLY-PAID EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
FOR THE PERIOD FROM MARCH 30, 1998
(INCEPTION) TO DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------------------------------
Fidelity Investments
---------------------------------------------------------------
Retirement Spartan
Vlasic Campbell Managed Money Equity- U.S. Equity
Stock Stock Income Market Income Index
Fund Fund Portfolio Portfolio Fund Fund
------ -------- ----------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income:
Net appreciation/(depreciation)
in fair value of investments $ 311 $ (279) $ - $ - $ (39) $ 44
Interest and dividends - 195 10 21 59 8
-------- -------- -------- --------- -------- --------
311 (84) 10 21 20 52
-------- -------- -------- --------- -------- --------
Contributions:
Participants 1,117 - 42 100 128 64
Employer 421 - 18 39 46 23
-------- -------- --------- --------- -------- ---------
1,538 - 60 139 174 87
-------- -------- --------- --------- -------- ---------
Loan repayments 274 - 11 21 26 11
Transfer from Campbell Soup
Company Savings and 401(k) Plan
for Hourly-Paid Employees 670 14,796 178 426 1,227 342
-------- -------- --------- --------- -------- ---------
Total additions 2,793 14,712 259 607 1,447 492
-------- -------- --------- --------- -------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to participants (232) (1,999) (25) (106) (132) (76)
Loans to participants (79) (361) (17) (23) (45) (24)
Loan administrative fees (4) - - (2) (2) (1)
Transfer to Vlasic Foods
International Inc. Savings and
401(k) Plan for Salaried Employees - - - - - -
-------- -------- ---------- --------- -------- ---------
Total deductions (315) (2,360) (42) (131) (179) (101)
-------- -------- -------- --------- -------- --------
Net increase prior to interfund
transfers 2,478 12,352 217 476 1,268 391
Interfund transfers 286 (609) 2 49 23 57
-------- -------- --------- --------- -------- ---------
Net increase 2,764 11,743 219 525 1,291 448
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period - - - - - -
-------- ---------- ---------- ------------ --------- ----------
End of period $ 2,764 $ 11,743 $ 219 $ 525 $ 1,291 $ 448
======== ========== ========== ============ ========= ==========
Fund Information
-------------------------------------------------------------------------------
Fidelity Investments
-------------------------------------------------------------
International
Growth Growth & Asset Participant
Magellan Company Income Manager Loan
Fund Fund Fund Fund Fund Total
------ -------- ----------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income:
Net appreciation/(depreciation)
in fair value of investments $ 160 $ 36 $ (11) $ (26) $ - $ 196
Interest and dividends 78 46 10 48 - 475
-------- -------- -------- --------- -------- --------
238 82 (1) 22 - 671
-------- -------- -------- --------- -------- --------
Contributions:
Participants 224 100 47 57 - 1,879
Employer 81 34 17 16 - 695
-------- -------- --------- --------- -------- ---------
305 134 64 73 - 2,574
-------- -------- --------- --------- -------- ---------
Loan repayments 50 21 14 7 (435) -
Transfer from Campbell Soup
Company Savings and 401(k) Plan
for Hourly-Paid Employees 1,151 475 227 210 1,053 20,755
-------- -------- --------- --------- -------- ---------
Total additions 1,744 712 304 312 618 24,000
-------- -------- --------- --------- -------- ---------
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO:
Distributions to participants (148) (57) (33) (33) (94) (2,935)
Loans to participants (100) (34) (27) (15) 725 -
Loan administrative fees (2) - (1) - - (12)
Transfer to Vlasic Foods
International Inc. Savings and
401(k) Plan for Salaried Employees - - - - (7) (7)
-------- -------- ---------- --------- -------- ---------
Total deductions (250) (91) (61) (48) 624 (2,954)
-------- -------- -------- --------- -------- --------
Net increase prior to interfund
transfers 1,494 621 243 264 1,242 21,046
Interfund transfers 126 64 (6) 8 - -
-------- -------- --------- --------- -------- ---------
Net increase 1,620 685 237 272 1,242 21,046
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of period - - - - - -
-------- ---------- ---------- ------------ --------- ----------
End of period $ 1,620 $ 685 $ 237 $ 272 $ 1,242 $ 21,046
======== ========== ========== ============ ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
VLASIC FOODS INTERNATIONAL
SAVINGS AND 401(k) PLAN FOR HOURLY-PAID EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
On March 30, 1998, Campbell distributed one share of Vlasic common stock to
shareowners of Campbell for every ten shares of Campbell capital stock held
at the record date in a tax-free distribution (the "spin-off"). At the time
of the spin-off, Vlasic began operations as a separate independent
publicly-owned company. In connection with the spin-off, Campbell
contributed the following businesses: Swanson frozen foods in the U.S. and
Canada, Vlasic pickles, Open Pit barbecue sauce, Campbell's mushrooms in the
U.S., Freshbake and non-branded frozen foods and SonA and Rowats pickles and
beans in the U.K., Swift and non-branded processed beef in Argentina and
Kattus gourmet foods distribution in Germany. In connection with the
spin-off, an independent savings and retirement plan was created for
employees named the Vlasic Foods International Inc. Savings and 401(k) Plan
for Hourly-Paid Employees (the "Plan"). The Plan was intended to replace the
benefits provided under the Campbell Soup Company Savings and 401(k) Plan
for Hourly-Paid Employees (the "Campbell Plan") for those participants who
became Vlasic employees at the time of the spin-off. The Plan was effective
as of the spin-off date, March 30, 1998.
On April 9, 1998, plan assets of approximately $20,775,000, representing
participant account balances, were transferred from the Campbell Plan. As a
result of the spin-off, units in the Campbell Stock Fund held in
participants' accounts in the Campbell Plan were converted into both units
in the Campbell Stock Fund and units in the Vlasic Stock Fund and
transferred to the Plan. Participants may elect to continue holding units in
the Campbell Stock Fund and units in the Vlasic Stock Fund in their
accounts, or participants may elect to liquidate all or a portion of the
units and reinvest the proceeds in any other investment fund. However, no
future contributions or investment transfers may be made to the Campbell
Stock Fund. Dividends paid on Campbell stock will be reinvested in the
Vlasic Stock Fund.
GENERAL
The Plan is a defined contribution plan covering hourly-paid employees at
substantially all of Vlasic's domestic locations. It is subject to the
Employee Retirement Income Security Act of 1974 ("ERISA"). The following
description of the Plan provides only general information. Participants
should refer to the Plan Document and Summary Plan Document for a more
complete description of the Plan's provisions and definition of terms.
ELIGIBILITY
Any employee who was a participant in the Campbell Plan at the spin-off date
shall be a participant in the Plan. Employees hired after the spin-off are
eligible to participate in the Plan upon the earlier of (i) completion of a
probationary period, or (ii) completion of one year of service.
CONTRIBUTIONS
Participants authorize payroll deductions, which are contributed to the Plan
and credited to their individual accounts. Contributions are limited to a
before-tax maximum of 10% or a post-tax maximum of 10%, or a combined
maximum of 15% of a participant's compensation, in multiples of 1%. However,
in accordance with the Internal Revenue Code, the amount of a participant's
before-tax contribution for calendar year 1998 was limited to $10,000.
Participants may also contribute amounts representing rollovers from other
qualified plans.
Vlasic makes matching contributions in the amount of 50% of all participant
contributions up to 5% of the participant's compensation beginning after one
full year of service. Vlasic matching contributions are invested in the same
funds as the participant's contributions. Vlasic, at its discretion, may
also make additional contributions.
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<PAGE> 6
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions
and allocations of Vlasic's matching contributions and Plan earnings.
Allocations are based on account balances. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING
Participants are immediately and fully vested in their contributions plus
actual earnings on their contributions. Vesting in the Vlasic matching
contribution portion of their accounts plus actual earnings on Vlasic's
matching contribution is based on the following:
<TABLE>
<CAPTION>
COMPLETED
YEARS OF SERVICE VESTING
<S> <C>
One year 20%
Two years 40%
Three years 60%
Four years 80%
Five years or more 100%
</TABLE>
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee contributions
in 1% increments in any of the following ten investment options.
Vlasic Stock Fund. Funds are invested in Vlasic Foods International Inc.
common stock, with a small portion invested in short-term money market
instruments for liquidity.
Managed Income Portfolio. Funds are invested in an open-end commingled pool
managed by Fidelity Investments which invests in short- and long-term
investment contracts issued by insurance companies, banks and other
financial institutions.
Retirement Money Market Portfolio. Funds are invested in shares of a
registered investment company managed by Fidelity that invests in high
quality, U.S. dollar denominated money market instruments of domestic and
foreign issuers.
Equity Income Fund. Funds are invested in shares of a registered
investment company managed by Fidelity that invests mainly in
dividend-paying common and preferred stocks.
Spartan U.S. Equity Index Fund. Funds are invested in shares of a registered
investment company managed by Fidelity that invests in shares of the
Standard & Poor's 500 stock index.
Magellan Fund. Funds are invested in shares of a registered investment
company managed by Fidelity that invests in common stocks of large
corporations as well as lesser known companies.
Growth Company Fund. Funds are invested in shares of a registered investment
company managed by Fidelity that invests in common stocks with emerging or
established growth potential.
International Growth & Income Fund. Funds are invested in shares of a
registered investment company managed by Fidelity that invests primarily in
foreign securities.
Asset Manager Fund. Funds are invested in shares of a registered investment
company managed by Fidelity that invests in equities, bonds and money market
instruments in both the domestic and foreign markets.
5
<PAGE> 7
1. DESCRIPTION OF THE PLAN (CONTINUED)
INVESTMENT OPTIONS (CONTINUED)
In addition to the above investment options, the Plan also permits funds to
remain invested in the Campbell Stock Fund. These funds are invested in
Campbell Soup Company common stock, with a small portion invested in
short-term money market instruments for liquidity.
PARTICIPANT LOANS
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their account balance. Loan
transactions are treated as transfers between the investment fund and the
Participant Loan Fund. Loan terms range from 1 to 4.5 years. Loans are
secured by the balance in a participant's account and bear interest at two
points above the prime rate in effect on the first business day of the
calendar quarter in which the loan was originated. Principal and interest
are paid ratably through payroll deductions.
PAYMENT OF BENEFITS
Participants with five continuous years of participation in the Plan may
withdraw, once in a calendar year, all or a portion of their account
balance, except the portion attributable to their before-tax account
balance. Participants age 59-1/2 or older may withdraw all or a portion of
their vested account balance. Participants under age 59-1/2 may withdraw
from their before-tax account balance without penalty only if immediate and
heavy financial hardship is demonstrated.
Upon termination of employment, participants under age 55 will receive a
lump sum amount equal to the vested value of their account. Participants
have the option to leave their account in the Plan if the balance is greater
than $5,000. Participants age 55 or older may receive distributions in the
form of a lump sum or in periodic installments.
FORFEITED ACCOUNTS
At December 31, 1998, forfeited Vlasic matching contributions in non-vested
accounts totaled approximately $3,900. These accounts will be used to reduce
future Vlasic matching contributions.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements have been prepared on the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices, which represent the
net asset value of shares held by the Plan at year end. The collective trust
fund is valued at cost, which approximates fair value. The fair value of the
Vlasic Stock Fund and the Campbell Stock Fund approximate market value.
Participant loans are valued at cost, which approximates fair value.
Purchases and sales of investments are recorded on a trade date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts in the financial statements and
accompanying notes. Actual results could differ from those estimates.
6
<PAGE> 8
3. TAX STATUS
Vlasic applied for a determination letter on April 15, 1999. The Internal
Revenue Service is currently reviewing the Plan and its qualifications under
the Internal Revenue Code. The Plan administrator believes that the Plan is
designed and operated in accordance with applicable requirements of the
Internal Revenue Code. Accordingly, no provision for income taxes is
required.
4. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds and a collective trust
fund managed by Fidelity. Fidelity is the trustee as defined by the Plan and
therefore, these transactions qualify as party-in-interest transactions,
which are exempt from the prohibited transaction rules of ERISA.
5. PLAN TERMINATION
Although Vlasic has not expressed any intent to do so, Vlasic has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
7
<PAGE> 9
VLASIC FOODS INTERNATIONAL
SAVINGS AND 401(k) PLAN FOR HOURLY-PAID EMPLOYEES
ITEM 27a FORM 5500
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST VALUE
<S> <C> <C> <C>
* Vlasic Foods International Inc. Common Stock Fund $2,155 $ 2,764
* Campbell Soup Company Common Stock Fund 5,943 11,743
* Fidelity Investments Managed Income Portfolio 219 219
* Fidelity Investments Retirement Money Market Portfolio 525 525
* Fidelity Investments Equity-Income Fund 1,319 1,291
* Fidelity Investments Spartan U.S. Equity Index Fund 405 448
* Fidelity Investments Magellan Fund 1,452 1,620
* Fidelity Investments Growth Company Fund 648 685
* Fidelity Investments International Growth & Income Fund 245 237
* Fidelity Investments Asset Manager Fund 297 272
Vlasic Foods International
Savings and 401(k)
Plan for Hourly-Paid
Employees Participant loans, 10.12% to 10.50% - 1,242
</TABLE>
* Party-in-interest
8
<PAGE> 10
VLASIC FOODS INTERNATIONAL
SAVINGS AND 401(k) PLAN FOR HOURLY-PAID EMPLOYEES
ITEM 27d FORM 5500
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE PERIOD FROM MARCH 30, 1998 (INCEPTION) TO DECEMBER 31, 1998
(IN THOUSANDS)
(SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF THE PLAN'S
ASSETS AS OF MARCH 30, 1998 AS DEFINED IN SECTION 2520.103-6 OF THE DEPARTMENT
OF LABOR RULES AND REGULATIONS FOR REPORTING AND DISCLOSURE UNDER ERISA.)
<TABLE>
Current
value of
asset on
Identity of Transaction Purchase Selling Cost of transaction Net gain
Party Involved Description of asset Type price price assets sold date or (loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Vlasic Foods Common Stock Fund Purchases $2,148 $ - $ - $2,148 $ -
International Inc. Sales - 366 346 366 20
Campbell Soup Common Stock Fund Purchases - - - - -
Company Sales - 2,775 1,675 2,775 1,100
Fidelity Investments Magellan Fund Purchases 590 - - 590 -
Sales - 282 289 282 (7)
Fidelity Investments Equity-Income Fund Purchases 302 - - 302 -
Sales - 203 210 203 (7)
Fidelity Investments Growth Company Fund Purchases 274 - - 274
Sales - 100 101 100 (1)
Fidelity Investments International Purchases 87 - - 87 -
Growth & Income Fund Sales - 66 69 66 (3)
Fidelity Investments Asset Manager Fund Purchases 140 - - 140 -
Sales - 52 53 52 (1)
Fidelity Investments Retirement Money Purchases 249 - - 249 -
Market Portfolio Sales - 149 149 149 -
Fidelity Investments Managed Income Purchases 85 - - 85 -
Portfolio Sales - 44 44 44 -
Fidelity Investments Spartan US Equity Purchases 164 - - 164 -
Index Fund Sales - 101 101 101 -
</TABLE>
9
<PAGE> 11
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Plan's Administrator has duly caused this annual report to be signed
on its behalf by the undersigned, hereunto duly authorized.
VLASIC FOODS INTERNATIONAL INC.
SAVINGS AND 401(k) PLAN FOR
HOURLY-PAID EMPLOYEES
Date: June 29, 1999 By: /s/ Joseph Adler
--------------------------------------
Joseph Adler
Plan Administrator
<PAGE> 12
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
1. Consent of Independent Accountants 12
</TABLE>
<PAGE> 1
EXHIBIT 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-48353) of Vlasic Foods International Inc. of our
report dated June 18, 1999 appearing on page 2 of this Form 11-K.
/s/ PRICEWATERHOUSECOOPERS LLP
Philadelphia, PA
June 28, 1999
